"Buildings": Stable performance aligned with our objectives in the first half

Al-Mabani held its first-half 2026 analyst conference, attended by Executive Vice President Tariq Al-Adesani and Chief Financial Officer Abhishek Rastogi, with the dialogue moderated by Acting Head of Investor Relations Nora Al-Zaheri.

Al-Mabani announced its financial results for the first half of 2026, reporting a significant decline in revenues and net profit, primarily due to the ongoing geopolitical situation. This was further impacted by costs related to projects under construction scheduled to open within the next year, which have begun to reflect on Al-Mabani’s financial results and are expected to continue until the actual commencement of operations for these projects.

The three anticipated projects include Aventura Mall and the Hilton Kuwait Al-Munqaf Resort, both expected to open at the end of this year, as well as The Avenues Riyadh, scheduled to open in March 2027.

The Group achieved a net profit of KD 32.4 million during the first half of 2026, compared to KD 50.3 million during the same period last year. It is worth noting that the first quarter of 2025 results included a one-time exceptional gain from the sale of land in Kuwait, which significantly raised the comparative base. Excluding this non-recurring gain, net profit remained stable and largely aligned with targeted levels.

Group revenues for the first half of the year reached KD 65.4 million, a relative decrease of approximately 4.5% compared to the same period last year. This decline is primarily attributed to the operational performance of the hospitality sector, which was affected by geopolitical developments in the region and their impact on travel movements during that period.

On the operational front, the Group continued to deliver strong performance, with recurring earnings before interest, taxes, depreciation, and amortization (EBITDA) reaching KD 44.6 million, while maintaining a gross profit margin of 71.4%, reflecting cost management efficiency and the continued robustness of operational performance.

Al-Mabani clarified that the Group’s currently managed assets consist of two commercial complexes with a total leasable area of 444,000 square meters, three hotels comprising 777 guest rooms, 669 residential units, and 4,513 square meters of total leasable office space. Next year, the Group will add 464,000 square meters of additional leasable area to its commercial complexes, along with 319 additional hotel rooms within the hospitality sector.

Over a three- to four-year period, the Group will continue its expansion plans by adding 190,000 square meters of total leasable area in its commercial complexes, 1,578 hotel rooms, 232 residential units, and approximately 58,568 square meters of total leasable office space.

Al-Mabani emphasized that despite increased financing allocated to support development projects, the capital structure continues to be managed efficiently in line with its growth strategy, while maintaining a strong financial position.

The Group’s operations maintained stable performance aligned with its objectives during the first half of the year. The Group’s priorities remain focused on completing projects under construction, maintaining financial discipline, and continuing to deliver sustainable value to its shareholders.

It noted that the company dedicates a significant portion of its efforts to achieving goals and excellence in environmental, social, and governance (ESG) areas, setting new targets to accelerate progress in these fields through numerous environmental, community, and governance initiatives.

Regarding the Avenue Kuwait project, it has continued to deliver stable performance and consistent operational metrics in terms of visitor numbers compared to the previous year, while achieving an occupancy rate of 98%, reflecting sustained strong operational performance.

The four-star Hilton Garden Inn Kuwait, directly connected to Avenue Kuwait via the Forum area, saw a decline in occupancy rates during the first half of the year due to the current geopolitical situation. Operational performance is expected to gradually improve as stability returns to the region.

Similarly, the five-star Waldorf Astoria Kuwait, directly connected to “Avenue Kuwait” via the Prestige area, was affected by the ongoing geopolitical climate. Occupancy rates declined during the first half of the year, with operational performance expected to gradually recover as regional stability is restored.

Aventura Mall, located in Jaber Al-Ahmad City, had its opening postponed from August to late October of this year. This project is among the most prominent upcoming developments, with leasing activity showing strong demand, as currently over 70% of the leasable space has been leased.

As for the Aventura Residences project, the residential sector comprises two phases. Phase One includes residential units, more than 50% of which were leased at the beginning of this year. Phase Two will feature townhouses alongside several apartment buildings.

Work on the Souq Sabah project, which includes a traditional heritage market and a hotel, continues to progress despite current challenges imposed by the prevailing situation on construction activities and material supply. Although the project timeline has experienced minor delays, the overall completion rate has reached 43%.

The Hilton Kuwait Resort – Al Manqaf project is currently undergoing renovation works, with a completion rate of 57%. The ongoing geopolitical situation has impacted supply chain factors for materials required for the project, leading to a rescheduling of the resort’s opening to December of this year.

Regarding projects in the Kingdom of Bahrain, “Avenue Bahrain” maintained stable occupancy levels during the first half of the year, despite challenges posed by the current geopolitical environment. Occupancy rates stood at 83% for Phase One of the project and 77% for the newly launched Phase Two.

The Hilton Garden Inn Bahrain, directly connected to “Avenue Bahrain,” recorded its first occupancy rate below 50% since its opening, with current operational performance at 41%. Performance is expected to gradually improve as geopolitical conditions stabilize and travel activity returns to normal levels.

Concerning projects currently under development in the Kingdom of Saudi Arabia, the Avenue Riyadh project is nearing the completion of construction works, with a building completion rate of 95%. It is scheduled to open in March of next year.

Leasing operations are also showing significant progress, with leased space reaching approximately 80%. The project also includes five towers that are progressing well in accordance with the approved schedule, with two of the five towers constructed up to the 35th floor. The project is scheduled to be completed and the towers opened in 2028, roughly one year after the opening of The Avenues – Riyadh.

As for The Avenues – Al Khobar project, leasing activities have commenced, coinciding with ongoing construction work that has reached a 53% completion rate. The project comprises a shopping mall, a hotel, and an office tower.